NYC Hotel to Be Converted Into Rent-Regulated Apartments

NYC Hotel to Be Converted Into Rent-Regulated Apartments

Owners have to pay the city back $4.4 million in improper tax credits.

(Photo by Anthony Quintano)

This is your first of three free stories this month. Become a free or sustaining member to read unlimited articles, webinars and ebooks.

Become A Member

Real estate fund manager CIM Group has to pay New York City more than $4 million, thanks to an eyeing from the government.

CIM’s 49 East 34th Street building, which had been operating as a hotel in Midtown Manhattan, illegally collected a tax break worth $4.4 million since its opening in 2007, according to a report from Curbed NY.

The building initially began as a condo project, and was therefore eligible for a 421-a property tax exemption, but was later sold to CIM group and used for short-term rentals. The building will close March 11th, and CIM group will be responsible for paying back the city both the $4.4 million in tax breaks it received, as well as $275,000 to cover the cost of the investigation, Curbed notes. CIM also has to convert it into rent-regulated apartments.

The 421-a break has been a source of controversy among New Yorkers because, first introduced in the 1970s, it was intended to give tax breaks to developers building multifamily housing in the city. Critics see the abatement as a giveaway to the wealthy.

Mayor Bill de Blasio — who says he is making housing a central theme for his administration this year — hasn’t taken a stand regarding the tax program.

The Observer reports that supporters says the abatement is a catalyst for securing developers who will build affordable housing, while critics note that One57, a luxury apartment building bordering Central Park, received the tax break despite its units selling for millions of dollars.

Marielle Mondon is an editor and freelance journalist in Philadelphia. Her work has appeared in Philadelphia City Paper, Wild Magazine, and PolicyMic. She previously reported on communities in Northern Manhattan while earning an M.S. in journalism from Columbia University.

Follow Marielle .(JavaScript must be enabled to view this email address)

Tags: new york cityaffordable housingbill de blasio

×
Next City App Never Miss A StoryDownload our app ×
×

You've reached your monthly limit of three free stories.

This is not a paywall. Become a free or sustaining member to continue reading.

  • Read unlimited stories each month
  • Our email newsletter
  • Webinars and ebooks in one click
  • Our Solutions of the Year magazine
  • Support solutions journalism and preserve access to all readers who work to liberate cities

Join 652 other sustainers such as:

  • Dina in San Francisco, CA at $60/Year
  • Anonymous at $10/Month
  • Andrew in Philadelphia, PA at $5/Month

Already a member? Log in here. U.S. donations are tax-deductible minus the value of thank-you gifts. Questions? Learn more about our membership options.

or pay by credit card:

All members are automatically signed-up to our email newsletter. You can unsubscribe with one-click at any time.

  • Donate $10 or $5/Month

    Next City notebook

  • Donate $20 or $5/Month

    The 21 Best Solutions of 2021 special edition magazine

  • Donate $40 or $10/Month

    Brave New Home by Diana Lind